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The Diamond Market

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The Diamond Market

Diamond Market Overview

Rough diamonds are naturally occurring crystals, and appear in a number of forms. In addition to diamonds from Canada, other leading suppliers of rough diamonds include Russia, Botswana, Democratic Republic of Congo, Australia, Angola, South Africa and Namibia.

Worldwide production of rough diamonds in 2016 amounted to approximately 129 million carats, at an average price of US$105 per carat, for a total market of US$13.5 billion.

Demand for rough diamonds, and therefore their pricing, is based on pull-through from demand for the polished stones used in jewelry. 

  • Rough diamond supply is constrained; although a number of mines have come onstream in 2017, some will reach the end of their lives by 2020; and
  • In the medium-term, global demand for diamonds is expected to exceed supply, leading to increased prices. The jewelry retail markets of China and India are seen as the key long-term growth areas.

The long-term outlook for the diamond market remains positive, with demand expected to outpace supply starting in 2019. World diamond jewelry demand in the next 10 years is forecast to grow at an average annual rate of about 3% to 4%, in real dollars. On the other hand, rough diamond supply volumes will rise in 2017, then plateau and fall off from 2020 onwards. This forecast reflects fundamental supply and demand factors rather than short-term fluctuations or unforeseeable long-term macroeconomic shifts. 

The international diamond jewelry market is large, amounting to approximately US$80 billion at retail in 2016. China, India and the US are expected to continue being major diamond jewelry consumers, driving rough-diamond demand.

Global diamond jewelry demand was flat in 2016. The US continued along its growth path. However, demand in India was hit by demonetization in the fourth quarter offsetting some of this growth. China and Hong Kong also saw weaker demand in US dollar terms as a result of weaker macroeconomics and a weaker currency.

 

Sources: KPCS statistics, company reports, census data, published trade statistics

This web page contains forward-looking information.   Forward-looking statements are provided for the purpose of providing information about management’s expectations and plans relating to the future.  Readers are cautioned that actual results may differ materially from those set forth herein and are referred to our Terms and Conditions for more information.